Third quarter 2015 revenue
November 03, 2015
Bezons
Disclaimer
Third quarter 2015
November 03, 2015
▶
This document contains forward-looking statements that involve risks and uncertainties, including references,
concerning the Group's expected growth and profitability in the future which may significantly impact the expected
performance indicated in the forward-looking statements. These risks and uncertainties are linked to factors out of the
control of the Company and not precisely estimated, such as market conditions or competitors behaviors. Any
forward-looking statements made in this document are statements about Atos’ beliefs and expectations and should be
evaluated as such. Forward-looking statements include statements that may relate to Atos’ plans, objectives,
strategies, goals, future events, future revenues or synergies, or performance, and other information that is not
historical information. Actual events or results may differ from those described in this document due to a number of
risks and uncertainties that are described within the 2014 Registration Document filed with the Autorité des Marchés
Financiers (AMF) on April 1st , 2015 under the registration number: D15-0277 and its update filed with the Autorité
des Marchés Financiers (AMF) on August 7, 2015 under the registration number: D. 15-0277-A01. Atos does not
undertake, and specifically disclaims, any obligation or responsibility to update or amend any of the information above
except as otherwise required by law. This document does not contain or constitute an offer of Atos’ shares for sale or
an invitation or inducement to invest in Atos’ shares in France, the United States of America or any other jurisdiction.
▶
Revenue organic growth is presented at constant scope and exchange rates.
▶
Business Units include Germany, France, United-Kingdom & Ireland, Benelux & The Nordics (BTN: The
Netherlands, Belgium, Luxembourg, Denmark, Finland, Sweden, and Estonia), Worldline, North America (USA and
Canada), and Other Business Units including Central & Eastern Europe (CEE: Austria, Bulgaria, Croatia, Cyprus,
Czech Republic, Greece, Hungary, Italy, Lithuania, Poland, Romania, Russia, Serbia, Slovakia, Slovenia, Switzerland
and Turkey), Iberia (Spain, Portugal, and Andorra), Asia-Pacific (Australia, China, Hong Kong, Indonesia, Japan,
Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan and Thailand), Latin America (Brazil, Argentina, Mexico,
Colombia, Chile, Guatemala, Jamaica, Peru, and Uruguay), India, Middle East & Africa (IMEA: Algeria, Benin, Burkina
Faso, Egypt, Gabon, Israel, India, Ivory Coast, Lebanon, Madagascar, Mali, Mauritius, Morocco, Qatar, Saudi Arabia,
Senegal, South Africa and UAE), Major Events, and Cloud & Enterprise Software.
Agenda
Third quarter 2015
November 03, 2015
1. Q3 2015 key figures
2. Key outcomes of the Atos-Siemens strategic review: Alliance
strengthened
3. Worldline and Equens contemplated transaction
4. Operational performance
5. Commercial activity
6. Update on North America
7. Contemplated acquisition of Unify
8. Conclusion and Q&A session
Q3 2015 key figures
Thierry Breton
Chairman & CEO
Q3 2015: revenue trend improvement confirmed
Q3 2015
revenue
Innovative digital
offerings*
Q3 2015
order entry
Supported by:
Third quarter 2015
November 03, 2015
€2,708m +22.6% year-on-year
+0.5% organic growth
Positive organic growth for the 4th quarter in a row
Representing 10% of Q3 2015 Group revenue
+18% organic growth
€2,531m
93% book to bill
Increasing focus on digital offerings
New sales organization launched mid-2014
* Cloud, Big Data & Analytics, Cyber-security, and Mobility. Company estimates, unaudited figures.
2015 objectives confirmed
Third quarter 2015
November 03, 2015
The Group confirms all its objectives for 2015 as raised
in the H1 release in July, i.e.:
2015 objectives*
Revenue:
The Group targets a positive revenue organic growth
Operating margin:
The Group has the objective to improve its operating margin
rate targeting 8.0% to 8.5% of revenue
Free cash flow:
The Group expects to generate a free cash flow of circa € 420 million
* including Xerox ITO contribution as of July 1st, 2015
Key outcomes of the
Atos-Siemens strategic review:
Alliance strengthened
Thierry Breton
Chairman & CEO
Siemens and Atos strategic review
Siemens
and Atos
strategic review
July 16, 2015
Assessment of the past successes
Exploration of future opportunities
Siemens
and Atos
strategic announcement
November 3, 2015
Third quarter 2015
November 03, 2015
The success story of a unique partnership in the
IT services market
Third quarter 2015
November 03, 2015
Over the last 4 years, the success of the partnership relied on:
Global IT contract
Accompanying
Siemens in the
achievement of its
operational targets by
managing their IT
backbone
Global Alliance
Joint development of
innovative offerings
Extensive business
cooperation through
early engagements
and complementary
offerings
Strategic shareholding
One seat at Atos
Board of Director
Enterprise size x>2
From net debt €-0.2bn
to net cash €+0.4bn
Stock price x>2
Market capitalization
x>3
The realization of an ambitious industrial project:
to become the European leader in digitization
Third quarter 2015
November 03, 2015
December 14, 2010 announcement: “Atos and Siemens announce their intention to
form a global strategic partnership to create a European IT champion”
Announced ambition was:
1
to operate “the IT backbone
of Siemens” best-in-class
√
• Successfully performed with increasing volumes
• Digitization of Siemens operations with
innovative solutions
3
“to shape the future of IT”
√
• Joint development of innovative solutions in
connectivity, Industrial Data analytics,…
• Atos #1 preferred European player* for digital
services in Cloud Services, Big Data, Social, and
Mobility
2
“to create a leading
IT services company”
√
• Atos : a leader in all major Industry analyst
ranking (Forrester Wave, Gartner Magic Quadrant,
Everest’s assessment, HfS Blueprint, IDC
MarketScapes…)
4
•
•
•
•
“to create value for Atos
shareholders, including Siemens”
Enterprise size x>2
From net debt €-0.2bn to net cash €+0.4bn
Stock price x>2
Market capitalization x>3
A success story to be continued
* IT decision makers survey conducted by a Tier 1 equity research team in October 2015
√
A special relationship with Siemens built over the
last 4 years
Joe Kaeser
Chief Executive Officer
of Siemens AG
Third quarter 2015
November 03, 2015
« I am pleased with the technological journey, the
extensive business cooperation, and the shareholder
value creation that Atos has performed since the start
of our Global Partnership, which is a benchmark in the
IT-Industry. Based on these achievements, I am
pleased to announce that Atos will extend its support
to Siemens in the IT services area and in the
implementation of our digitalization agenda. Since with
this, I see an even greater value creation potential, we
have decided to remain shareholder of Atos for the
next five years. »
Third quarter 2015
Global Partnership extended for the next 5 years
November 03, 2015
The strategic review main outcomes are:
Global IT contract
IT contract extended until
December 2021
Committed minimum
volumes increased from
€5.5bn to €8.73bn
Scope extended beyond
Siemens IT infrastructure to
businesses digitization of
its divisions
Global Alliance
Joint collaborations
expansion to new fields:
 Industry 4.0
 Advanced data analytics
 Cyber-security
 Device connectivity
Joint R&D investments
increased from
€100m to €150m
A new opportunity:
acquisition of Unify
#3 world leader of integrated
communication solutions
enhancing social collaboration,
digital transformation, and
business performance
€340m cash consideration
Strong value creation from
€130m cost savings through fully
funded restructuring
>+15% EPS accretion
by 2017
Siemens shareholding lock-up agreement extended until September 30, 2020
Worldline and Equens
contemplated transaction*
Thierry Breton
Chairman & CEO
* subject to work councils’ information and consultation processes,
banking regulatory authorities and antitrust authorities’ approvals
A major transaction* between Worldline and
Equens, structured in two components
Merger of financial
processing activities
“Equens Worldline Company”
63.6% owned by Worldline
c. €700m 2016e revenue
c. €120m 2016e OMDA
Third quarter 2015
November 03, 2015
Acquisition of Equens’ merchant
acquiring activities
PaySquare for €72m in cash
12x 2015e OMDA
Worldline 2015 pro forma revenue increasing by circa €310m to exceed €1.5bn
* subject to work councils’ information and consultation processes,
banking regulatory authorities and antitrust authorities’ approvals
Worldline structure post transaction
* estimated figure
Third quarter 2015
November 03, 2015
To summarize the transaction…
Third quarter 2015
November 03, 2015
Project to create the largest pan-European financial
processor with a unique geographical reach and innovation
capacities
Significant step up for Worldline Commercial acquiring
Industrial combination with massive synergies generation
and strong acceleration of OMDA growth profile
Worldline owns call options to acquire 100% of
“Equens Worldline” in 2019
Limited cash-out preserving the Worldline’s financial
flexibility to keep acting as a consolidator of the European
payment landscape
Operational performance
Elie Girard
Group CFO
Constant scope and exchange rates reconciliation
In € million
Statutory revenue
Scope effect
Exchange rates effect
Revenue at constant scope and exchange rates
Q3 2015
2,708
2,708
Q3 2014
2,209
399
87
2,695
Third quarter 2015
November 03, 2015
% change
+22.6%
+0.5%
▶ Scope effect was related to the acquisitions of Bull (France, August 11th, 2014) and Xerox ITO (North
America, June 30th, 2015) combined with the outsourcing of on-site services activities in France (France,
March 1st, 2015) and the early termination of the Work Capability Assessment BPO contract with the
Department for Work and Pensions (United Kingdom, March 1st, 2015).
▶ Exchange rates effect mainly resulted from the British pound and the US dollar strengthening versus the
euro.
Third quarter 2015
Q3 2015 revenue by Service Line
In € million
Managed Services
Consulting & Systems Integration
Big Data & Cyber-security
Total IT Services
Worldline**
TOTAL GROUP
Q3 2015
1,527
774
113
2,413
November 03, 2015
Q3 2014* % organic
1,514
+0.8%
794
-2.6%
109
+4.0%
2,417
-0.2%
% yoy
+35.9%
+1.2%
+129.9%
+24.6%
294
278
+6.0%
+8.4%
2,708
2,695
+0.5%
+22.6%
* at constant scope and exchange rates
** Worldline reported +5.0% organic growth on a stand alone basis
Third quarter 2015
Q3 2015 revenue by Business Unit
In € million
North America
United-Kingdom & Ireland
Germany
France
Benelux & The Nordics
Other Business Units
Total IT Services
Worldline**
TOTAL GROUP
Q3 2015
489
458
389
363
253
462
2,413
November 03, 2015
Q3 2014* % organic
495
-1.1%
448
+2.2%
399
-2.6%
354
+2.5%
263
-3.8%
458
+0.8%
2,417
-0.2%
% yoy
+232.3%
+8.1%
-0.1%
+21.7%
+0.3%
+8.2%
+24.6%
294
278
+6.0%
+8.4%
2,708
2,695
+0.5%
+22.6%
* at constant scope and exchange rates
** Worldline reported +5.0% organic growth on a stand alone basis
Q3 2015 headcount evolution
Third quarter 2015
November 03, 2015
Commercial activity
Patrick Adiba
Executive Vice President & Chief Commercial Officer
Commercial activity dashboard
Third quarter 2015
November 03, 2015
Order entry
Book to bill ratio
€2,531m
93%
+14% year-on-year
Backlog
Qualified pipeline
€18.7bn
€5.9bn
1.7 years of revenue
6.3 months of revenue
Third quarter 2015
Key wins in Q3 2015
November 03, 2015
German bank
Extension of scope
Global
Entertainment
Extension of scope
Scandinavian
utility
New logo
Renewal
German
airport
New logo
New logo
Global healthcare
leader
Extension of scope
Extension of scope
Renewal
Materialization of the fertilization strategy
Third quarter 2015
November 03, 2015
Fertilization as % of Group order entry:
31%
implemented in 2014 as part of
19%
Q3 2013
The fertilization strategy
the new sales organization is
Q3 2015
materializing in the Group order
entry mix which reveals the
26%
17%
9M 2013
capability of the Group to
generate additional revenue on
9M 2015
Based on c. 90% of order entry
existing contract
Siemens awarded significant new Cloud contracts
to Atos to transform its legacy IT Infrastructure
Third quarter 2015
November 03, 2015
Smart storage
Enterprise storage
Modernization of enterprise
storage environment
for 5 years
SAP HANA
Global HANA implementation
for ERP and HR for
6 years and a half
Global enterprise file
synchronization & share
services for 5 years
A major
global IT services
agreement in
2015
Virtual client
Cloud-based
virtual client services
for 6 years
Cloud & Data centers
Managing
Data centers workloads
for 6 years
€ 800 million of Total Contract Value in Cloud-based digital
transformation already signed
Extension of the Global IT contract agreed in 2011
Minimum volume commitment:
Third quarter 2015
November 03, 2015
8.73bn
€
from July 2011 to December 2021
€5.5bn
from July 2011 to June 2018
Siemens is a powerful reference for other Atos’ clients
Update on North America
Michel-Alain Proch
Senior Executive Vice President
& CEO North American Operations
Update on North American operations
Third quarter 2015
November 03, 2015
Integration plan well on track
Xerox partnership first results
▶
▶
▶
▶
NAO Excom is in place: representing company
DNA: 8 Atos – 8 ITO – 2 New
Atos’ methodologies: Lean, TOP, bid control
building on ITO customer care
Large ex-ITO clients renewed: 2 major clients
renewed for the next 3 years generating $>300m
order entry
▶
▶
Focus on the Digital journey
▶
▶
▶
Governance well in place: weekly pipe reviews
– monthly executive meetings
First outsourcing deal signed: Midrange / 2016
transition / $80m TCV
First Systems Integration deal signed:
application testing
$>500m TCV pipe in Q4 / Q1
Presented to > 50 MNCs CIO/CTO and TPA
advisors: in advance vs. competition
▶
Orchestrated/Automated Hybrid Infra: strong
IP developed - patent pending
▶
Integration of own & partners technologies:
SNOW – EMC/VM – IPSOFT
▶
Fertilization Europe/US providing its first results
in pipe
Strong commercial activity: 60 joint account
plans – 250 client presentations
6 material deals to win in: 3 NextGen Infra – 1
legacy – 1 Specialized – 1 Application Management
Contemplated acquisition
of Unify*
* subject to work councils’ information and consultation and the approvals of the regulatory and antitrust authorities
#3 world leader of integrated communication
solution serving c. 75% of Fortune 500
Key figures
Third quarter 2015
November 03, 2015
FY 2015 revenue
By activity
By geography
Platforms
▶
▶
▶
▶
▶
▶
Germany
RoW
€ 1.24bn FY 2015
revenue
Headquartered in Munich
and present in over 60
countries
€100m R&D spend in FY
2015
Intellectual Property :
over 3,000 patents
c. 5,600 FTEs as of
September 2015
Joint Venture between
Gores Group (51%) and
Siemens AG (49%)
28%
17%
Software
40%
15%
Managed &
Professional
Services
28%
41%
Austria 4%
11%
UK
Maintenance &
Installation
Indirect
16%
USA
56%
44%
Direct
By sales channel for Software & Platforms
Unify fiscal years ending September 30th
Combination of Unify and Atos would create a key building
block of the digital transformation of customers
Circuit platform:
Third quarter 2015
November 03, 2015
▶ Enable customer
driven convergence
of IT and Coms
▶ Enable a new way to
work through proactive digital
customer
engagement and
follow-up
▶ End-to-End security
and reliability onpremises and in the
Cloud
Strategic benefits of the combination
Unify today
Direct
sales
Third quarter 2015
November 03, 2015
Benefits of integration in Atos
Driving growth and customer
satisfaction in key markets
Significant scale and geographic expansion in key
markets and top accounts
Channels SMB segment
Increasing revenue and share in the
Expand the reach of Atos in the SMB segment for
its solutions
Services, Looking for a strategic partner to
address the changing in market place
service
delivery (cloud, Big Data, security,…)
Expanded breadth of world class services delivered
by Atos, global Tier1 provider with leadership in
cloud, Big Data, security,…
Product
portfolio
Leading the communication industry
transformation from HW to SW requires
high level R&D investments and scale
Access to Atos global clients base and partners
ecosystem brings scale which Atos intends to
reinforce with industry leading strategic partners
Contemplated transaction features
Price paid
Scope
▶ 100% outstanding shares held by Siemens and Gores Group
▶ €50m
Pensions
▶ €200m of pension deficit at closing
Restructuring
Reps &
Warranties
Next steps
November 03, 2015
▶ €340m in cash
Net debt
Taxes
Third quarter 2015
▶ c. €250m of potential tax cash benefits
▶ €370m restructuring plans, fully provisioned at closing and cash funded
▶ €80m Representations & Warranties securing plan
▶ Closing expected within the next 3 months subject to employee representative
bodies consultation and customary antitrust approvals
▶ Looking at a potential strategic partner to leverage the product activity
Fully provisioned and cash funded
contemplated restructuring plans
2015e
c. €1.2bn
revenue
c. €5m
EBITDA
Efficiency optimization
2 restructuring plans
fully provisioned at
closing and cash
funded by the sellers
1 Direct costs (€25m): Restructuring
€267m
2 Marketing & Sales (€40m): Move
alpha plan in progress
€130m expected cost savings
from further restructuring:
Third quarter 2015
November 03, 2015
2017e
c. €1.2bn
revenue
of current Unify overstaff
of the sales channels from direct to
indirect
>15%
EBITDA
3 G&A (€65m): Corporate function
c. €-45m
EBIT
€103m
of further restructuring
alignment to industry best-in-class
standards
€370m restructuring fully funded by the sellers
to support the 2015e-2017e evolution
>12%
EBIT
Third quarter 2015
Expected value creation for Atos
November 03, 2015
Strategic
partnership
on software
& platforms
completed
2015e
2016e
OR
Unify: A new
Atos division
for software
& platforms
2017e
c. €0.55bn*
c. €1.2bn
c. €40m
c. €95m
c. €150m
N/A
neutral
c.+30bp
c.+30bp
Discontinued operations EBITDA
N/A
N/A
c. 100m**
N/A
Discontinued operations net income
N/A
c. €10m
N/A
N/A
EPS accretion
N/A
positive
c. +15%
Revenue
c. €1.2bn c. €0.4bn
Operating margin
c. €-45m
Effect on Group operating margin
Cash proceeds from disposal
YES
OR
c. +20%
NO
* Including revenue with scope previously accounted as “discontinued operations”
** Before synergies with strategic partner. Comparable peers trading at circa 10x EBITDA
Conclusion
Thierry Breton
Chairman & CEO
Key takeaways
Third quarter 2015
November 03, 2015
Positive revenue trend is confirmed for the fourth quarter in a row
Siemens strategic alliance strengthened:
•
•
IT contract extended until December 2021 with committed minimum
volumes increased from €5.5bn to €8.73 billion
Shareholding lock-up agreement extended for the next 5 years
Contemplated acquisition of Unify: a building block in Atos’ clients
digital journey generated at least +15% EPS accretion by 2017
Transformational contemplated transaction with Equens anchoring
Worldline’s leadership in European e-payment services and
preserving its financial flexibility
Xerox ITO integration well on track
Questions & Answers
Thank you
Atos, the Atos logo, Atos Consulting, Atos Worldgrid, Worldline, BlueKiwi, Bull, Canopy
the Open Cloud Company, Yunano, Zero Email, Zero Email Certified and The Zero
Email Company are registered trademarks of the Atos group.
© 2015 Atos. Confidential information owned by Atos, to be used by the recipient only.
This document, or any part of it, may not be reproduced, copied, circulated and/or
distributed nor quoted without prior written approval from Atos.